Flex investors may receive additional information about the case by clicking the link "Submit Your Information" above.
According to the complaint, Flex is principally in the business of electronics manufacturing services. Flex is a provider of design, engineering, manufacturing, and supply chain services and solutions, from conceptual sketch to full-scale production. In October 2015, Flex announced that Nike had selected it to help enhance its shoe manufacturing process, with a particular emphasis on automating and modernizing the very labor-intensive process by which Nike manufactured sneakers. The Nike contract was part of Flex’s strategic pivot at that time to what it called its “Sketch-to-Scale” strategy, which was an effort to identify new customer opportunities that involved Flex earlier and more frequently in product design, development, and manufacturing.
The Class Period commences on January 26, 2017, when CEO Michael McNamara (“McNamara”) declared that “Our Sketch-to-Scale strategy remains firmly on track as reflected in our third quarter performance.” He also announced that “the innovations that [Nike is] seeing coming out of our team, that is our team, our guys and their guys, are probably above expectation of what they anticipated . . . the results that they’re seeing are above expectations.”
According to the complaint, on April 26, 2018, Flex disclosed: (1) weaknesses in internal controls relating to Flex’s customer contracts; and (2) operational issues plaguing Nike. Flex confessed that it was investigating a whistleblower’s allegation that Flex improperly accounted for certain obligations in a customer contract and certain related reserves, and that the SEC had been informed. Following this news, Flex’s stock lost $3.61 per share, or over 21%, on April 26, 2018.
Then, on October 25, 2018, Flex announced that it was immediately winding down the co-manufacturing operations with Nike because they were not commercially viable, as it was later announced that Flex could not sustainably manage the contract. In addition, McNamara, who just three months earlier announced he was taking “direct ownership” of the Nike project to ensure its “operational success,” was suddenly retiring from Flex with, as one market analyst put it, no “obvious choices for a replacement from the existing senior management.” Following this news, Flex’s stock lost $3.82 per share, or over 35%, on October 26, 2018.
The complaint alleges that throughout the Class Period, the defendants failed to disclose, among other things: (1) material weaknesses in Flex’s internal control over financial reporting related to customer contracts; and (2) that the Nike project was not commercially viable, Flex was encountering severe operational issues, and Flex could not sustainably manage the contract in a profitable way.
If you are a member of the class described above, you may no later than June 4, 2019 move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of their choice, or may choose to do nothing and remain an inactive class member.
Kessler Topaz Meltzer & Check, LLP has not filed a complaint in this matter. If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at firstname.lastname@example.org. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.
Kessler Topaz Meltzer & Check, LLP
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